Transactions & fees
A bitcoin transaction is not a message saying move ten dollars from A to B. It consumes whole outputs from earlier transactions and creates new ones, which is why change addresses exist and why your wallet's arithmetic sometimes looks strange. UTXO is the word for those spendable pieces, and it explains most of what follows.
Fees are the part that costs real money. You do not pay a percentage, and you do not pay for the amount you send. You pay for the size of the transaction in virtual bytes, at a rate you choose, competing with everyone else waiting in the mempool. A payment of five dollars and a payment of five million can cost exactly the same, and a wallet sweeping up many small inputs can cost far more than either.
The rest of the section is what happens when that goes wrong. A transaction that pays too little sits unconfirmed, sometimes for days. Replace by fee lets the sender raise the offer. Child pays for parent lets the receiver rescue it. Both are here, with the conditions under which each one actually works.
Confirmations, txids, coinbase transactions and PSBTs round it out: the words you need to read a block explorer without guessing.
40 terms. Last reviewed 2026-09-24.
Terms in Transactions & fees
- Bitcoin transactionalso TransactionA bitcoin transaction is a signed instruction that destroys some existing coins and creates new ones in their place, which is the only way value ever moves on the network.
- Child pays for parentalso CPFP, Ancestor miningChild pays for parent rescues a low fee transaction by spending its unconfirmed output in a second transaction whose fee covers both, since miners judge the pair together.
- CoinbaseThe coinbase is the free-form field inside a mining reward transaction where the miner writes arbitrary bytes, and it has nothing to do with Coinbase the exchange.
- Coinbase block heightThe coinbase block height is the block's own height, written as the first bytes of the coinbase field, which BIP34 has required of every block since March 2013.
- Coinbase transactionalso Generation transactionThe coinbase transaction is the first transaction in every block, created by the miner to pay out the block subsidy plus the fees, with no inputs to spend.
- Confirmationalso Confirmation score, Confirmations, Confirmed transaction, Unconfirmed transactionA confirmation is one block of proof of work stacked on top of the block that contains your transaction, so a payment in the latest block has exactly one.
- Digital signaturealso Signature, ECDSA signatureA digital signature is the proof, produced with a private key, that whoever authorized a bitcoin transaction controlled the key its coins were locked to, and that the details have not been altered.
- Escrow contractAn escrow contract locks bitcoin in an output that neither trading party can spend alone, releasing it only when both agree or a named third party breaks the tie.
- Fee ratealso sat/vB, Sats per vbyte, Satoshis per virtual byteA fee rate is the price you pay per unit of transaction size, quoted in satoshis per virtual byte, and it is the only number miners sort by when filling a block.
- High-priority transactionalso Free transactionA high-priority transaction was one that old versions of Bitcoin Core would mine for free because it spent old, large coins, a mechanism deleted from the software in 2017.
- Locktimealso nLockTimeLocktime is the last four bytes of a transaction, setting the earliest block height or clock time at which the network will accept it into a block.
- Mempoolalso Memory poolA mempool is the set of valid transactions a node has heard about but not yet seen in a block, held in memory while they wait for a miner to pick them up.
- Mempool policyalso Relay policyMempool policy is the extra set of rules a node applies before it will accept and relay a transaction, stricter than consensus and adjustable by whoever runs the node.
- Minimum relay feealso Relay feeThe minimum relay fee is the floor a transaction must pay before a node will keep it at all, lowered in Bitcoin Core 30.0 from 1 satoshi per virtual byte to 0.1.
- Null data transactionalso Data carrier transaction, OP_RETURN transactionA null data transaction carries an output that stores a short message instead of money, marked provably unspendable so nodes can discard it from the set of spendable coins.
- OutpointAn outpoint is the 36-byte pointer that identifies exactly one transaction output, combining the 32-byte id of the transaction that created it with the 4-byte index of its position.
- Output indexalso voutAn output index is the position of one output inside a transaction, counted from zero, and it is the number after the colon when you see a coin written as txid:1.
- Package relayPackage relay lets a node accept a group of related unconfirmed transactions together, so a child paying a high fee can carry a parent the network would otherwise refuse.
- PSBTalso Partially Signed Bitcoin Transaction, BIP174A PSBT is a transaction file that is not finished yet: it carries the inputs, outputs, and everything a signer needs to verify them, and it travels between devices instead of across the network.
- Relative timelockA relative timelock makes a transaction input invalid until the coin it spends has aged a set number of blocks or 512 second intervals since its own confirmation.
- Replace-by-feealso RBF, Replace by fee, Opt-in replace by fee, Full-RBFReplace-by-fee lets an unconfirmed transaction be swapped for a higher paying version of itself, and modern Bitcoin Core relays that replacement whether or not the original signaled for it.
- Sequence numberalso nSequenceThe sequence number is a four byte field on every transaction input that signals fee replacement, switches locktime on, and can encode a relative timelock.
- Serialized transactionalso Raw transactionA serialized transaction is the exact byte string a wallet hands to the network, the hexadecimal form that every node parses, hashes, and relays without altering a single byte.
- SIGHASH_ALLSIGHASH_ALL is the flag that makes a signature commit to every input and every output of a transaction, so nothing about the payment can be changed after signing.
- SIGHASH_ANYONECANPAYSIGHASH_ANYONECANPAY is a modifier that strips every other input out of the digest, so a signature covers only the one coin it spends and others can join the transaction freely.
- SIGHASH_NONESIGHASH_NONE is the flag that signs the inputs of a transaction while committing to none of its outputs, which leaves the destination of the money open to anyone who handles it.
- SIGHASH_SINGLESIGHASH_SINGLE is the flag that ties a signature to one output only, the one sitting at the same position in the list as the input being signed.
- Signature hashalso SighashThe signature hash is the digest a wallet actually signs: a rebuilt copy of the transaction, trimmed according to the flag chosen for that input, then hashed twice with SHA-256.
- Standard transactionA standard transaction is one that ordinary nodes agree to relay and hold in their mempools, which is a stricter bar than merely being valid under the consensus rules.
- Stuck transactionalso Pending transactionA stuck transaction is one that has been broadcast and accepted by nodes but keeps missing blocks, because the fee it pays sits below what miners are currently taking.
- Transaction feealso Miner fee, Miners fee, Network feeA transaction fee is the difference between what a bitcoin transaction spends and what it pays out, collected by whichever miner includes it in a block.
- Transaction IDalso Txid, Transaction hashA transaction ID is the 64-character hexadecimal fingerprint of a bitcoin transaction, produced by hashing it twice with SHA-256, and it is how everyone refers to that payment.
- Transaction inputalso Input, TxInA transaction input is the half of a payment that names one specific coin you already own and proves you are allowed to spend it, consuming it completely.
- Transaction malleabilityalso Transaction mutabilityTransaction malleability is the flaw that let a third party change a transaction's id without changing where the money went, by re-encoding the signature data it contained.
- Transaction outputalso Output, TxOutA transaction output is an amount of bitcoin plus the lock that decides who can spend it next, and it is the only place bitcoin actually exists.
- Transaction version numberThe transaction version number is the first four bytes of a transaction, and it tells validators which optional rule sets, such as relative timelocks, apply to it.
- TRUC transactionalso v3 transaction, Topologically restricted until confirmationA TRUC transaction trades the freedom to chain unconfirmed spends for a reliable fee bump, by declaring version 3 and accepting at most one unconfirmed parent and one unconfirmed child.
- UTXOalso Unspent transaction outputA UTXO is one unspent chunk of bitcoin sitting at an address, created whole by an earlier transaction and spendable only in full, never in part.
- Virtual bytealso vbyte, vBA virtual byte is the unit wallets price transactions in, equal to one quarter of a transaction's weight rounded up, so every fee quote reads in satoshis per vbyte.
- Weight unitalso WUA weight unit is the accounting unit that replaced the byte in bitcoin's block size limit, letting SegWit raise capacity without a hard fork by pricing signature data at a quarter.
The other 13 sections
- BasicsWhat bitcoin is, what a satoshi is, and the handful of ideas the rest of the glossary is built on.
- Addresses & keysWhere coins get sent, what a private key actually controls, and how one seed produces thousands of addresses.
- Wallets & custodyHot, cold, custodial and multisig, and what each one changes about who can move your coins.
- Privacy & securityThe attacks that take people's bitcoin, and the habits and tools that stop them.
- Buying & exchangesOrder types, spreads and fee schedules: the vocabulary an exchange uses while it is charging you.
- Markets & investingMarket cap, volatility and spot ETFs. The language of price, without the price predictions.
- Mining & consensusHow new blocks get made, what difficulty adjusts, and why the rules hold with nobody in charge.
- Protocol & upgradesSegWit, Taproot, soft forks and BIPs: how bitcoin changes and who gets to decide.
- Lightning & layer 2Payment channels, invoices and routing, for moving bitcoin without paying for space in a block.
- Regulation & taxKYC, the Travel Rule, MiCA and capital gains: the rules that reach your account and your tax return.
- Culture & historyMt. Gox, the genesis block, HODL, and the events and slang that shaped how people talk about bitcoin.
- Nodes & softwareBitcoin Core, full nodes, pruning and RPC: the software that enforces the rules.
- Developer referenceP2P message types, opcodes and script terms: the field names you meet reading bitcoin code.
Frequently asked questions
Why will my wallet not send my whole balance?
Because a balance is a pile of separate coins, and spending each one costs a fee. Coins small enough that the fee to move them exceeds their value get left behind. Wallets call these dust, and it is arithmetic rather than a bug.
What decides what I pay in fees?
Size in bytes and how busy the network is, not the amount you send. A transaction moving a million dollars can cost less than one moving fifty, if it uses fewer inputs. That is why fee estimates are quoted per virtual byte.
My transaction is stuck. What can I do?
Usually wait, because fee markets fall as often as they rise. If you cannot, replace-by-fee lets you resend the same transaction at a higher rate, and child pays for parent lets the recipient bump it instead. Both need wallet support.
How many confirmations are enough?
One is enough for small amounts. Six is the convention for large ones, because reversing six blocks would cost an attacker more than almost any single payment is worth. Exchanges set their own thresholds and publish them in their support pages.